Army veteran Judy Taylor needed $24,000 in startup cash to open her bike shop in Illinois. ()

When Army Staff Sgt. Judy Taylor left the service in May, she had a vision. Specifically, a bike shop. In Roscoe, Ill. — a town of 10,000 interlaced with bike trails that already supports a number of fitness-related businesses. She knew she could get Midwest Track N’ Trail rolling, but she’d need to borrow about $24,000 to make it happen.

That’s no small trick. About 40 percent of small-business owners are rejected by banks, according to Scott Griest, founder and CEO of small-business funding firm American Finance Solutions.

Yet Taylor got the money. How? She got her ducks in a row before even sitting down with a lender — and you can, too. Here’s how:

Get your discharge papers in order

Without those, banks likely will not even get the process started.

Get outside validation

Taylor entered a local small-business contest, where she demonstrated a practical plan for success. She won $10,000 in free services from other local merchants, and the win gave her major points in the eyes of local lenders. “It definitely shaped the banks’ feeling about me, because they saw there were other people who believed in me,” she said.

Line your pockets, Part I

Before approaching a lender, the aspiring entrepreneur will need to sock away some cash. They call it having skin in the game: a demonstration that the business owner has something at risk, alongside the bank’s gamble. That money helps, too, during the long ramp-up phase. “Obviously you want to have some cash reserves, because it will take a while to get the business going. So we look for that, and we look at the amount of debt you have. You don’t want to have too much debt when you are starting a new business,” said Bill Peele, CEO and president of the Mecklenburg and South Carolina region for SunTrust Banks.

Line your pockets, Part II

Personal finances — cash and debt — are important considerations for lenders. But there are other assets that carry weight, especially tangible property that can serve as collateral, said David Nayor, co-president and chief operating officer of BoeFly, an online business-loan marketplace based in New York City. Real estate, machinery, equipment, inventory: Get them all organized and cataloged before sitting down with a banker.

Start a business plan now

Every new venture needs a detailed business plan in order to sway potential lenders. Why wait until you’ve swapped into civvies? A business plan requires considerable detail, and an early start will help you hit the ground running. “During their transitional period, [veterans] need to be working on a business plan, especially the two-year financial projections. It needs to be detailed and realistic,” said La Mancha Sims, founding partner of loan broker Triton Business Group in Marietta, Ga. Details require some digging, so an early start can make a difference.

Get help

Taylor said she approached multiple lenders in her early efforts and found she was getting nowhere. Then she discovered the local office of the Small Business Administration. The SBA already gets high marks for facilitating Patriot Loans, a form of financing that helps accelerate the lending process for veterans. But the agency can do a lot more, Taylor said. In her case, SBA agents helped introduce her to bankers and showed her how to organize a professional presentation and how to put her pitch online in a compelling format. That assistance made a difference when it was time to approach a new round of potential lenders.

Find the right fit

Not all banks are the same, and not all are right for you, Nayor said. Some lenders take on only big clients, while others aim very small. Some have geographic restrictions while others lend only to certain industries. Do your homework. Services such as Nayor’s can help: He keeps more than 4,000 lenders in his database.

Be specific about your need

Before you even think about asking for a loan, know what you are going to do with the money. Will you be leasing real estate, expanding the warehouse, accumulating inventory? “They like to see it when people have a specific plan for how they will use those funds to grow their business,” Griest said. “If you are a restaurant and you are going to add a patio before the summer season, that is a great use of those funds. But you need to know that from the start.”